Like peas and carrots, some items just go together.
When it comes to 3PL order fulfillment services, this happens because you’re offering a discount when they’re ordered at the same time or because they naturally seem to end up in the same shopping cart. When you’ve clearly identified products that go together, you’ll save time, money and grief by having them pre-packed together into kits. Product fulfillment companies are experts at streamlining the shipping process, and kitting is just another way of moving your inventory faster.
WHAT IS KITTING?
Kitting is an inventory management technique where individual, related products are packaged and shipped together as a single bundle or unit. This process involves grouping complementary items to create a new SKU (stock keeping unit) that is sold as one item.
Types of Kitting:
- Order Fulfillment Kitting: Involves packaging similar individual items together, ready to be shipped as a single unit.
- Warehouse Kitting: The process of gathering necessary materials to make up a specific product and delivering them as a kit.
- Logistics Kitting: Involves grouping products for delivery from manufacturers to retailers or distributors in bulk.
How Kitting Works For You
Let’s say you’re offering a sale on your most popular vitamins, the Energy Blend 3000. You’ve noticed that over half the time someone orders the Energy Blend 3000, they also order a container of Super Memory Booster. In order to increase efficiency in the warehouse, you can create a single box that contains both Energy Blend 3000 and Super Memory Booster, offered at a marginal discount. Now the warehouse only has to pull a single box when the kit is ordered, instead of hunting down both items.
Kitting is also a great way to handle freebies and introductory packages. Maybe the first time someone orders from your pet catalog, you also include a package containing samples of your top selling rawhides, dog biscuits, a refrigerator magnet with your company’s logo and a catalog. Instead of warehouse workers running all over the warehouse looking for each item, you’ve got them all together in one bagged package, ready for workers to grab and put in the box. It’s beautiful, it’s efficient and it reduces errors on commonly ordered combinations of products.
Benefits of Kitting
Organizations that successfully optimize their production routing can see up to a 20% reduction in production lead times, according to a McKinsey study.
Specifically, the benefits of kitting include:
- Reduced packaging and shipping expenses
- Improved inventory management
- Enhanced customer experience
- Faster order processing
- Increased operational efficiency
eCommerce order management can get complicated, especially if you offer a lot of different items.
By combining certain items into kits, you simplify the product fulfillment process and make it easier to keep track of items. What would have been a collection of UPC codes to track becomes just one when your items are kitted – for example, your two vitamins have their own UPCs when ordered individually, but when ordered together, they have a unique third UPC code that counts both items and removes them from inventory together.
When mispacking happens on the warehouse floor, it can be costly. Not only are you forced to refund a customer’s money, accept a returned item and pay shipping both ways for the privilege (and a third time if the customer simply wants a replacement), you’ve got to pay someone to repack the items that should have been packed correctly the first time. By keeping commonly combined items pre-packaged, you’ll reduce the chances for these costly mistakes.
In addition to saving time and reducing errors, kitting may also save shipping expenses if custom packaging can be designed to reduce the box size or weight over using standard boxes. Of course, if customers tend to order many items at once, you may have a harder time kitting to reduce shipping than if they usually just order a few things at a time.
No matter what kind of business you have, though, kitting performed by a top fulfillment services company can and does make a huge difference to your customers and to your bottom line.
Unlock the power of kitting for your e-commerce business with ShipWizard! Don’t miss out on the opportunity to take your e-commerce fulfillment to the next level. Contact ShipWizard today and let our kitting experts design a tailored solution for your business. Whether you’re looking to create promotional bundles, influencer kits, or streamline your product offerings, we’ve got you covered.
